Big-spending clubs could face curbs on how much they pay for players' wages and transfers under proposals being considered by the game's leaders and European sports ministers.

The move would hit clubs with mega-rich owners such as Chelsea as they would
not be allowed to spend more than they earn in order to steal a march on their
rivals.

The idea has been mooted as part of a new Europe-wide licensing system after
the possibility of a salary cap for clubs was abandoned.

Sports minister Richard Caborn, who attended a meeting in Brussels yesterday
involving UEFA, ministers and EU officials, said: 'It was recognised
that a strict salary cap would be unworkable but it was broadly agreed that
there should be some proper relationship between income and expenditure.

'The details have not been worked out yet - this was the first discussion
about it.

'There were five sports ministers involved so politicians and football are
working together very closely on this.'

Clubs would not be allowed to spend more than they earn on transfer fees and
players' wages but they would be allowed to borrow for capital investments such
as new stadia or training grounds.

Chelsea and their Russian billionaire owner Roman Abramovich are the obvious
examples of a club spending more than they earn. In the first two years of
Abramovich's ownership they reported losses of £228million and spent £276million
on transfers.

The proposals will now be formalised in the current review of European
football being carried out by Jose Luis Arnaut, a former presidency minister in
the Portuguese government.

It will not be easy to gain the support of clubs however. G14, the grouping of
elite European clubs including Arsenal, Manchester United and Liverpool,
considered imposing a ceiling of 70 per cent for the proportion of revenue that members
could spend on wages.

That never became a formal rule for members though and was just a voluntary
recommendation.

The Football League have introduced a rule for League Two clubs where only 60 per cent of revenue can be spent on wages, and are trialling the same rule in League
One.